It’s just a piece of cake to apply for a loan in a particular lending institution. But what borrowers missed to understand are the grounds for getting their loan approved. It’s the crucial part, especially on the lender’s part.
Why? Because what lender companies have in common is they want to make sure that the borrower can pay back the debt on time.
You’ve got a lot of options on where to get a loan. But you should consider facts on how to increase your chance of getting your loan approved.
Consider these five tips, and be it your guide as you plan to get a loan.
Know The Lending’s Eligibility Criteria
The first thing you should do is to check the lending institution’s eligibility criteria before applying for a loan. This step is often disregarded by the borrowers, which leads to getting rejected.
It’s an essential point that you must consider. Some of the standard eligibility criteria are:
- Your occupation. Are you employed or self-employed?
- If employed, you state your current employment status.
- If self-employed, you should have a minimum turnover as per lending’s standard policy.
- The age limit for salaried professionals is between 21 to 60 years old.
- Salaried applicants must at least earn a minimum salary a month. They should provide proof of income like a payslip.
Note that lenders usually don’t accept salaried cash applicants.
- The work experience of the applicant should be at least one year. If you’re just got work in an organization, you should be working for at least a minimum of six months.
Here’s another thing that you should be careful of. You make sure that all the details you provide must be correct. You double-check everything before submitting your application: your name, address, employment details. Fill out all the needed sections and never leave it blank. It sounds so simple, but it can lead to rejection.
The Importance of Understanding Your Credit
If you’re new to getting a loan, you must know and understand what credit scoring is. It’s the basis of all lending institutions on checking the borrower’s creditworthiness.
A credit score is the compilation of your credit transactions. The yishun money lender will know your credit behavior, whether you pay on time or get too many loans in different lending companies. If you get too many loans, lenders might think you desperately need the money and cannot repay. They can even know if you got rejected for several loans in a row or the opposite.
Your credit score will be your image for the lenders. If you want to get your loan approved, you should check your credit first before applying.
To check your credit history, you can request a copy of your credit file online through SingPost branches at the Credit Bureau office of CrimsonLogic Service Bureaus. It will charge you $6.42 for the CBS Report inclusive of GST.
Please note that if you have nothing much in your credit score, it will be a challenge for you to get a loan because lenders can’t assess your risk as a borrower. You should build credit first before you obtain a loan. This will add to your credit history. Better find some less risky lender to get one and make sure you pay it on time.
Decide How Many Loans You Need
Don’t get too excited about getting a loan. Make sure everything’s calculated. Remember, it isn’t free money. You’ve got to pay it with interest on time. Or else, your credit score will drop.
What you need to do is run a preliminary loan calculation before settling a loan amount. If you’re eyeing a lending company, you can go to their site and use their loan calculator. This way, you’ll be able to know how much you’ll pay over time. You can choose what tenure you are comfortable with. Be it monthly or quarterly.
Determine What Type of Loan You Need
What’s your purpose for taking out a loan? Is it for your child’s education? A hospital Bill? Is it for renovating your home? Or should it be for buying a new home?
You need to be familiar with different types of loans. Choose that meets your needs. For instance, you need money for your health, home repairs, or other expenses. A personal loan can be your loan choice.
But note that there are loans that must be used for a specific purpose, like a mortgage loan. You can only use this if you want to buy a new home. Another type of loan is a student loan. Taking out such a loan will require you to provide proof of enrollment in a degree.
So it’s essential that you would be clear with your purpose.
Choose Where You’ll Get a Loan
Now that you know the importance of your credit history and what type of loan you’re needing, you can now shop where to apply for a loan.
There might be many lending companies you can find in Singapore but know that they don’t offer the same products and services. If it does, there might be different features on every product and service.
For example, you might need a student loan, and you should start searching for those best-known institutions for providing affordable loans.
If you’re looking for personal loans, almost all are offering such a product. All you need to do is compare their interest rates and look at the terms and conditions of their product. They vary depending on the lender’s policies. Note that every lending company does have charges. It’s another thing that you should check.
A tip for you, choose a lender with low-interest and comfortable term comfortable terms that you won’t get pressure to repay.
Just a little warning, though. Loan sharks are lurking here in Singapore. If you don’t know about them, these are unlicensed moneylenders that offer attractive loan features. A payday loan could be an option. However, it’s expensive.
Understanding How Loan Works
We tend to borrow money without understanding how the loan works. Before you get frustrated about your loan being declined, better know the basics.
Know how loans are being repaid, how much interest you’re going to pay, what will be the terms and conditions of your loan.
Also, make sure that you impress the moneylender woodlands with your credit history. Check it by requesting a copy of your credit file. If you think it’s not appealing to them, you have to fix it first rather than getting declined.